As the smart electric vehicle market enters the stage of large-scale development, the upstream and downstream of the automotive industry chain are ushering in new opportunities and challenges. The picture shows the inauguration ceremony of the Collaborative Innovation Center for Supply Chain (S100) in the automotive industry. The center will work with upstream and downstream enterprises in the industrial chain to carry out a series of work such as supply chain risk analysis.

I am afraid that there is no industrial product that can connect all participants in the long supply chain with tens of thousands of parts and components like automobiles. A smart electric vehicle, which is "armed to the teeth" by batteries, various sensors and software, needs to go through more processes than traditional fuel vehicles, from product design definition to driving out of the production line. This means that the automotive supply chain is becoming more complex than ever.

From January to October this year, China's automobile production and sales were 1.10 million and 2401.6 million respectively, an increase of 2396% and 7.8% year-on-year respectively. It is worth mentioning that since the beginning of 9, China's automobile export performance has also been particularly prominent, of which the export of new energy vehicles will be 1,2023 units, a year-on-year increase of 99.5%. The data of both production and sales and soaring exports prove that Chinese automobiles have a first-mover advantage in electrification and intelligence.

At the 2023 Global New Energy and Intelligent Vehicle Supply Chain Innovation Conference held not long ago, representatives from supply chain enterprises such as governments, industry associations, universities and institutes, vehicle companies, automotive chip manufacturers and power battery manufacturers gathered together. In the era of smart electric vehicles, how should OEMs grasp the relationship with suppliers? Will the dominance of the upstream and downstream of the industrial chain change hands? This series of issues deserves attention.

We can't do our own thing, we have to rely on integrated development

Zhang Yongwei, vice chairman and secretary general of the China Electric Vehicle 100 Association, believes that as the intelligent electric vehicle market enters the stage of large-scale development, the pattern of the automobile industry has also changed, the automotive industry supply chain has ushered in a new major change, and the core relationship of the automotive supply chain is undergoing major changes. Different from the traditional chain relationship in the past, the automotive supply chain is now evolving into a network structure of "multi-subject participation and more integration of professional division of labor".

"Taking the most common intelligent cockpit screen in a new car as an example, there are dozens of suppliers involved behind a screen. This number is likely to be even higher in the future as technology evolves. Zhang Xiong, deputy general manager of GAC Aion New Energy Automobile Co., Ltd., said frankly that in the process of developing smart electric vehicles for car companies, the complexity of supply chain management is an unavoidable challenge.

The reporter noted that due to the high requirements of Chinese consumers for the electrification technology and intelligent level of automobiles, more and more foreign-funded car companies have increased their investment in localized R&D in China and have worked closely with local Chinese suppliers.

Wei Jianbin, full-time deputy director of the manufacturing headquarters of Dongfeng Nissan Passenger Vehicle Company and general manager of Guangzhou Fengshen Automobile Co., Ltd., said that in the new energy vehicle supply chain, Dongfeng Nissan will accelerate the implementation of the localization strategy, "as long as there are mature suppliers in China, we will adopt them."

Since the beginning of this year, the competition in China's new energy vehicle market has become more intense, and the prices of many new cars have repeatedly fallen. In the face of cost pressure brought about by the price war in the auto market, the relationship between automakers and suppliers has become the focus of the industry. However, there is one industry consensus that can be determined: the upstream and downstream of the automobile industry chain can no longer do their own work, but rely on integrated development.

Pan Yu, vice president of supply chain development of NIO, said that in the face of challenges, NIO's supply chain management strategy can be summed up in three words: mutual trust, mutual integration, and mutual strength. He explained to reporters: "Mutual trust is a transparent supply chain, and the two sides are bound for a long time to create certainty; Mutual integration is joint research, and vehicle companies and supply chain partners come together to overcome various technical difficulties; Mutual strength is to make the industry ecology better through long-term cooperation, so that car companies, partners, and supply chain systems can achieve common development. ”

As a representative of the core supplier of intelligent vehicles, Chen Liming, President of Horizon Robotics, publicly called at the meeting that in the second half of automotive intelligence, he hoped that the automotive supply chain would accelerate the creation of an open ecology and allow supply chain enterprises and vehicle enterprises to achieve win-win cooperation.

"OEMs and supply chain companies should strive to strengthen technical collaboration, explore standardization in hardware, and avoid reinventing wheels, so as to reduce resource waste and improve R&D efficiency." Chen Liming said that in today's mesh supply chain ecology, it is difficult for vehicle companies to control system costs if they do not contact with major parts and functional suppliers.

The upstream and downstream of the industrial chain should make new contributions to the "going overseas" of Chinese automobiles

Zhang Yongwei said that from the overall perspective of the global regional layout, the automotive supply chain is forming a "new triangle pattern of China, the United States and Europe". He also predicted that in the near future, China is likely to become the center of the global automotive supply chain.

On the one hand, China has formed a relatively complete electrification supply chain, which occupies an important position in the world. Taking power batteries as an example, about 70% of the world's battery production capacity is in China at this stage.

On the other hand, China has been the world's largest automobile market for many years, and Chinese consumers have strong and demanding demand for smart electric vehicles, which can drive the development of related domestic industries.

"I hope that China can successfully build a number of world-renowned brands in the field of new energy vehicles, lead the image of Chinese auto brands to the world, and help the high-quality development of China's economy." Liu Pingping, chairman of the China Brand Construction Promotion Association and former deputy director of the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China, said that considering that the global market has entered the era of brand economy, 20% of the world's well-known brands occupy nearly 80% of the market share, so China's automobile industry chain should also pay attention to the power of the brand when entering the overseas market.

In order to improve the level of supply chain management and strengthen the brand building of China's automotive supply chain, the Collaborative Innovation Center for Supply Chain of the Automotive Industry (S100) came into being at this conference.

It is understood that the center is initiated by the China Electric Vehicle 11 Association, the vehicle enterprises and supply chain enterprises voluntarily set up a third-party coordination platform in the field of automotive supply chain, it will focus on <> key contents, to carry out supply chain risk analysis, to ensure the safe operation of the industrial chain supply chain and a series of work.

"All parties in the industry should be fully aware of the importance of the automotive supply chain, and whether the supply chain management capability is strong or not is related to the cost reduction and quality improvement of enterprises, the introduction of new technologies, and business continuity, which will become the key to determining the life and death of enterprises," Zhang Yongwei reminded, especially in core areas such as materials, batteries, chips, and software, and special attention should be paid to the risk of "breaking the chain and leaving the chain".

"In the era of traditional fuel vehicles, the proportion of key components of Chinese companies is not high, and it is basically dominated by European, American and Japanese companies; However, in the era of smart electric vehicles, the Chinese factor is becoming more and more important, and China's automotive supply chain is expected to become an important global center and create higher value. As Zhang Yongwei said, China should not only contribute to the global automotive industry through trade, but also through the supply chain.

The successful experience of China's power battery, automotive chip companies and vehicle companies over the years shows that building a new automotive supply chain can not only boost Chinese auto brands to go overseas, but also become one of the links between China and the world.

China Youth Daily, China Youth Network reporter Xu Yajie Source: China Youth Daily